Customers Demand Electronic Links

Nov. 1, 2000
The Associated Equipment Distributors' recent executive forum on electronic commerce illustrated the Internet's fast-growing role in the construction

The Associated Equipment Distributors' recent executive forum on electronic commerce illustrated the Internet's fast-growing role in the construction industry, including rentals.

At last year's forum on rentals, the question of whether e-commerce would play an important role in our industry was raised frequently. That question is now moot. The theme of the debate is no longer whether e-commerce will be important. That's like debating the merits of electricity. It's now a matter of how to use it.

Keynote speaker Timothy Perini of e-Bricks brought up some interesting points:

The U.S. construction industry annually incurs about $1.5 trillion in courier costs, $5.4 trillion in reprographic costs and $660 billion in travel expenses. These costs can be reduced dramatically through electronic communication.

The Internet is inexpensive to use compared with large server-based networks or PC-based software systems, and a lot of applications are free. This can level the playing field for many small companies.

The pressure to use technology will pervade the supply chain, forcing even reluctant participants to wire up. Eighty-two percent of respondents to a survey of American Subcontractor Association members use e-mail daily, and the average Internet user among the respondents spends more than five hours per week online, primarily for business purposes.

Buyers of equipment can reduce processing costs up to 70 percent, get access to more sellers, find better prices and more timely deliveries, and access links to estimating and cost-accounting systems. Sellers can reduce processing costs, access more buyers, lower customer acquisition costs and get paid quicker. The Internet doesn't address the local nature of the business, but it can solve the need for up-to-date data and facilitate the locating of hard-to-find products.

A five-contractor panel discussed how they use the Internet. They reported that an increasing number of contractors are buying laptop computers for their job foremen. Those foremen value speed of communication. The biggest problem they face is unexpected breakdowns, especially in the middle of the night or on weekends. The ability to access the inventory of their rental suppliers can help them make immediate decisions on how to solve a breakdown problem.

Contractors say the speed of obtaining information is as important to them as the content itself. "We did a study of mechanics doing repairs and discovered that, while a machine is down, easily a third to a half of their time is spent gathering information," one contractor said. In addition to mechanical diagnosis, they spend a lot of time looking for service manuals and parts information. Being set up electronically can speed the process.

E-mail is becoming increasingly important, the contractors emphasized. Construc-tion is a collaborative effort that might require communication involving contractors and subcontractors, manufacturers, distributors, rental companies, engineers, architects and other suppliers. The ability to share information with many parties saves time and money and maximizes efficiency.

Nothing can replace the importance of taking time to get to know customers and understand their processes and needs. But, increasingly, a certain level of electronic proficiency is being expected and demanded by customers. Falling behind can put you at a competitive disadvantage.